• Buying property with OTS

I have identified a property on which a seller has defaulted to NBFC and is an NPA. Seller wants to sell property directly before it gets repossesed and goes into auction. NBFC is ready to do OTS. I plan to take a home loan from a big private bank and they are fine with giving loan on NPA property. All parties are now aligned.
My concern is after my sale deed is registered and the NBFC gets their DD, they are saying they will provide original documents in 45 days. My bank will release DD to seller for remaining amount(above OTS) after these old original documents are recieved by them. Seller wants to give possession after they recieve their DD (which is about 5% of total consideration)
In this case, do I have any risk in buying this property and in getting possession after 45 days after registration. I am getting title search and one week public notice before buying it.
Asked 16 days ago in Property Law
Religion: Hindu

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15 Answers

Why 45 days 

 

original documents should be handed over in a weeks time 

 

45 days waiting period is risky 

 

ask NBFC to give original documents within a week or so

Ajay Sethi
Advocate, Mumbai
87596 Answers
6134 Consultations

5.0 on 5.0

  1. After sale deed is registered, DD from bank of purchaser will be handed over to (fare enough).
  2. Property documents will be furnished to buyer with 45 days, amount of OTS will be released only after documents are received by buyer’s bank. (fare enough).
  3. Possession of property will be given 45 days after registration. (not fare).
  4. Registration and putting purchaser in possession of property are contemporaneous transaction.

Advice: insists on simultaneous possession of property more so when document  will be furnished with 45 days.

Ravi Shinde
Advocate, Hyderabad
2490 Answers
41 Consultations

5.0 on 5.0

First you ascertain the title to the seller and other aspects pertaining to the property including the details of mortgage loan. 

Then you can enter into a sale agreement with the seller to the effect and terms that have been agreed between you both. 

After that you can proceed with the proposed purchase as per the program that you have mentioned here. 

T Kalaiselvan
Advocate, Vellore
77748 Answers
1509 Consultations

5.0 on 5.0

Yes it's a risk if party doesn't give you possession. It's better to take possession on date of payment

Prashant Nayak
Advocate, Mumbai
26998 Answers
84 Consultations

4.4 on 5.0

There is no risk if you make proper sale deed draft. No matter whether the property is registered and you will get possession after 45 days of registration.

Ganesh Kadam
Advocate, Pune
12329 Answers
189 Consultations

4.9 on 5.0

Original documents needs to be handed over within seven days or maximum fifteen days

Forty five days waiting time is quite absurd.

Once the title search and public notice is done tell NBFC to release the original documents or you may cancel the registration

Zafreen Khan
Advocate, Greater Mumbai
18 Answers

Not rated

Dear Client, 

check the status of the property and get the paper work done strongly with out any error. try to know the reason for the delay. 

Anik Miu
Advocate, Bangalore
4635 Answers
50 Consultations

4.9 on 5.0

- As per banking rule, the said private bank who is going to sanction loan to you , will not handover the consideration amount to the seller without getting the authority letter from that seller and the NBFC . 

- Further, except the said bank , you have no right to collect the sale deed 

- Hence, you can inform the said bank to collect the sale deed directly from the office of the registrar after taking  the authority letter from the seller and the NBFC, and further to receive the previous originals of the property within a week time. 

Mohammed Shahzad
Advocate, Delhi
9707 Answers
116 Consultations

5.0 on 5.0

1. The property is a mortgaged property which can not be sold without the written consent of the mortgagee NBFC.

 

2. The standard procedure in such cases is that a tripartite agreement is signed by the Borrower, The NBHC & also the prospective buyer detailing all the terms of the deal in the matter.

 

3. If such tripartite agreement is signed, the mortgagee NHBC can bring the original documents to the office of the Registrar and your bank can bring the DDs and the documents can be handed over to you while registering the sale deed and your bank can collect the same  as mortgaged papers. The Seller can also get the extra amount of the OTC amount.

 

4. Alternatively, your bank can write to the said NHBC to send them the mortgaged papers by send ing the OTS amount and can pay the balance 5% to the seller  after he issues a possession letter to you.

Krishna Kishore Ganguly
Advocate, Kolkata
26517 Answers
726 Consultations

5.0 on 5.0

Indemnity bond also needed

Prashant Nayak
Advocate, Mumbai
26998 Answers
84 Consultations

4.4 on 5.0

You obtain a proper legal opinion from an experienced lawyer in the local by producing the relevant documents pertaining to the property including the details of current mortgage loan. 

You may proceed only if recommended. 

The fifteen days notice through a local newspaper will not come to your rescue in case of a litigation in future involving this property. 

 

T Kalaiselvan
Advocate, Vellore
77748 Answers
1509 Consultations

5.0 on 5.0

You can obtain lawyer written opinion that tile is clear and marketable 

 

issue public notice that you are purchasing property and to submit their objections within stipulated period 

 

you can take our search in local clusters to find out whether any case is pending against seller 

 

ask seller to execute indemnity bond to indemnify you in case third party claims are made 

Ajay Sethi
Advocate, Mumbai
87596 Answers
6134 Consultations

5.0 on 5.0

- Yes, you can publish a notice in the newspaper after mentioning that you are going to  purchase a property , and if any one having any type of objection or claim then they can approach you within a period of 15 days from the date of notice. 

- Further, you can take an Indemnity bound from the seller. 

Mohammed Shahzad
Advocate, Delhi
9707 Answers
116 Consultations

5.0 on 5.0

Dear Client,

public notice, title search and proper sale deed registration would be enough to avoid the litigation. 

Anik Miu
Advocate, Bangalore
4635 Answers
50 Consultations

4.9 on 5.0

1. The property is mortgaged with the said NBFC only since the original document si lyin with them.

 

2. The bankrupt  seller  might have taken further unsecured loan but it should not effect your buying the said property after registering the sale deed and after collecting the original title deed of the said property.

Krishna Kishore Ganguly
Advocate, Kolkata
26517 Answers
726 Consultations

5.0 on 5.0

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